Telefonica faces broadband price probe

EC raises anti-trust allegations

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Spanish incumbent Telefonica is facing an investigation by the European Commission (EC) amid allegations that it abused its dominant position regarding the provision of broadband.

The EC has sent a "statement of objections" to Telefonica explaining why it believes the Spanish telco has been "abusing its dominant market position in contravention of EC Treaty rules in the form of a so-called 'margin squeeze' in the Spanish broadband internet access markets since 2001".

In other words, the EC alleges that the difference between Telefonica's wholesale charges for broadband and the price of its own retail service wasn't enough for rival operators to provide a competitive service.

"Telefonica would have incurred substantial losses if it had had to pay the wholesale tariffs it has been imposing on its competitors...constituting a margin squeeze," the EC said in a statement.

It also said that while it has sent a statement of objections, it does not mean Telefonica is guilty of breaching anti-trust rules. The Spanish incumbent has two months to reply to the EC's allegations.

No one from Telefonica was available for comment at the time of writing. ®